ZIMBABWE Stock Exchange (ZSE)-listed beverages blue-chip, Delta Corporation has sunk US$1,1 million into sorghum planting under a strategy to secure inputs for its massive operation.
The firm has been making fresh forays into domestic and foreign markets recently, unlocking opportunities for growth and higher demand for beer.
Corporate affairs executive Patricia Murambinda told businessdigest this week that the US$1,1 million would be enough to produce 13 425 tonnes of sorghum to quench up the thirst of imbibers as demand rises.
“We have invested US$1,1 million in the current season for the production of 13 425 tonnes of sorghum,” Murambinda said.
“A total of 9 508 hectares were planted this season compared to 9 209 hectares planted last season due to a marginal increase in anticipated beer demand.”
Murambinda said the ZSE’s biggest counter by market capitalisation will continue with the sorghum contract scheme.
“The planted hectarage increased by 3,2% from 9 209 hectares last season to 9 508 hectares this season. Total money invested increased this season by 15% compared to last year, being driven by an increase in the price of agricultural inputs,” she added.
The company’s sorghum requirements vary every season depending on projected domestic beer consumption levels.
Delta requires on average a total 13 000 tonnes of red and white sorghum annually.
It has been an eventful year at Delta, which recently finalised a deal to take over Mutare Bottling Company (MBC), an asset that has strategically placed it at the heart of a bustling region, making up 10% of Zimbabwe’s beverages market.
Finance director Alex Makamure told businessdigest recently that the listed giant will flex its muscles within that “territory” from the Mutare plant while shipping cans and PET products from operations in Harare and Bulawayo to scale up volumes.
“The transaction adds volume to the Delta business,” Makamure said.
The deal whose value was not disclosed was announced after a key regulator agreed that it would not create monopolies.
It gives Delta’s sparkling beverages franchise fresh growth impetus through forays into a region that has seen investor interests since diamond multinationals trooped to exploit the resource about a decade ago.
Delta produces soft drinks under licence from the Coca Cola Company.
The MBC transaction had already attracted market interest since it was announced last year, with researchers at Inter Horizon Securities predicting that it potentially laid the foundation for a 700% growth in revenue during the full year to March 2021.
It marked a grand step in Delta’s ambition to mount bases in strategic markets, possibly giving it leverage to enter the adjacent Manica province in Mozambique.